AU Small Finance Bank loans rise 42% YoY in Q1 on positive sentiment

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The country’s largest small financial lender, AU Small Finance Bank (SFB) recorded 42% year-on-year (YoY) credit growth to Rs 49,366 crore in the first quarter ended June 2022 (Q1FY23).

Its gross advances stood at nearly Rs 34,687 crore at the end of June 2021 (Q1FY22). Sequentially, advances increased by 6% from Rs 46,789 crore at the end of March 2022 (Q4FY22).

The AU SFB, in a BSE filing, said the ratio of retail to wholesale loans stood at around 90:10 in June 2022, down from around 88:12 at March 31, 2022.

Loan disbursements increased by 345% year-on-year in the first quarter of FY23 to reach Rs 8,445 crore from Rs 1,896 crore in the first quarter of FY22. Sequentially, however, disbursements declined up 18% from Rs 10,295 crore in the quarter ended March 31, 2022.

Also Read: AU Small Finance Bank to invest over Rs 500 cr for IT and digital makeover

“In the first quarter of FY23, despite rising inflation and tighter interest rates, positive sentiment on the ground associated with resilient consumption supported economic activity and income generation,” said the lender.

On the liabilities side, the Janipur-based lender’s total deposits increased by 48% year-on-year to Rs 54.631 trillion from Rs. 37.014 trillion as of June 30, 2021. Sequentially, deposits increased by 4 % against Rs 52,585 crore as of March 31, 2022. .

The reversal of the interest rate cycle increased the incremental cost of funds, but was well offset by a concurrent increase in disbursement yields during the quarter. The incremental cost of funds increased to 5.7% in Q1FY23 from 5.4% a year ago and 5.3% in Q4FY22.

The share of low-cost deposits, or Current Account Savings Account (CASA), in total deposits improved to 39% at the end of the first quarter of FY23, from 26% in the first quarter of fiscal year 22.


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